Lam Research (LRCX) is looking like an interesting pick from a technical perspective, as the company reached a key level of support. Recently, LRCX crossed above the 20-day moving average, suggesting a short-term bullish trend.
A well-liked tool among traders, the 20-day simple moving average offers a look back at a stock's price over a 20-day period. This is very beneficial to short-term traders, as it smooths out short-term price trends and gives more trend reversal signals than longer-term moving averages.
The 20-day moving average can show signals that are similar to other SMAs as well. If a stock's price is moving above the 20-day, the trend is considered positive. When the price falls below the moving average, it can signal a downward trend.
LRCX could be on the verge of another rally after moving 12.6% higher over the last four weeks. Plus, the company is currently a Zacks Rank #2 (Buy) stock.
The bullish case solidifies once investors consider LRCX's positive earnings estimate revisions. No estimate has gone lower in the past two months for the current fiscal year, compared to 2 higher, while the consensus estimate has increased too.
With a winning combination of earnings estimate revisions and hitting a key technical level, investors should keep their eye on LRCX for more gains in the near future.
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